More than 51 million retired workers received a Social Security check in June. For a majority of these retirees, this check represents a financial lifeline they can't live without.
For 23 years, national pollster Gallup has been conducting annual surveys to gauge retired workers' reliance on Social Security income . In 2024, just 11% of respondents noted that their Social Security check wasn't necessary to make ends meet. Since 2002, between 80% and 90% of retirees have consistently told Gallup that they rely on their monthly payout to cover at least some portion of their expenses.
In other words, getting as much as possible out of Social Security isn't just a nice perk -- it's a necessity for most current and future retirees.
But to maximize what you'll receive from Social Security, you'll first need to understand the nuts and bolts of calculating your payment. This includes your claiming age, which could drastically alter what you'll collect per month and during your lifetime -- especially if you choose to collect at the earliest (age 62) or latest (age 70) traditional claiming ages.
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These four variables are used to calculate your monthly Social Security check
Although certain aspects of Social Security can be confusing or come as a surprise (e.g., Social Security benefits can be taxed at the federal level, as well as in nine states), the variables used to calculate your monthly check are easy to understand. In no particular order, these four factors are:
Your work and earnings history are pretty much inseparable. When the Social Security Administration (SSA) calculates your monthly payout, it'll use your 35 highest-earning, inflation-adjusted years. That means if you earn more in wages and salary during your lifetime, there's a good chance you'll collect a larger benefit in retirement.
On the other hand, those who have not worked for at least 35 years can expect to be penalized. For every year less than 35 worked, the SSA averages $0 into your calculation.
Your full retirement age represents the age you become eligible to receive 100% of your retired-worker benefit. Since your full retirement age is entirely determined by your birth year , it's the only factor of the four that you have no control over.
The fourth variable -- the one that's often most responsible for big swings in monthly and lifetime benefit collection -- is your claiming age. Even though retired workers have the option to collect their payout as early as age 62, the program incentivizes patience with a monetary "reward." For every year an eligible worker waits to claim their payout, beginning at age 62 and continuing until age 70, their benefit can increase by as much as 8%. You can see how this dynamic plays out in the table below.
| Birth Year | Age 62 | Age 63 | Age 64 | Age 65 | Age 66 | Age 67 | Age 68 | Age 69 | Age 70 |
| 1943-1954 | 75% | 80% | 86.7% | 93.3% | 100% | 108% | 116% | 124% | 132% |
| 1955 | 74.2% | 79.2% | 85.6% | 92.2% | 98.9% | 106.7% | 114.7% | 122.7% | 130.7% |
| 1956 | 73.3% | 78.3% | 84.4% | 91.1% | 97.8% | 105.3% | 113.3% | 121.3% | 129.3% |
| 1957 | 72.5% | 77.5% | 83.3% | 90% | 96.7% | 104% | 112% | 120% | 128% |
| 1958 | 71.7% | 76.7% | 82.2% | 88.9% | 95.6% | 102.7% | 110.7% | 118.7% | 126.7% |
| 1959 | 70.8% | 75.8% | 81.1% | 87.8% | 94.4% | 101.3% | 109.3% | 117.3% | 125.3% |
| 1960 or later | 70% | 75% | 80% | 86.7% | 93.3% | 100% | 108% | 116% | 124% |
Data source: Social Security Administration.
Collecting benefits at ages 62 and 70 comes with clear advantages and drawbacks
Though it may not be apparent from the large percentage differences in the above table, every age in the traditional claiming range of 62 through 70 has its own unique set of advantages and drawbacks. Looking ahead, the earliest and latest claiming ages (62 and 70) are liable to increase in popularity. Let's take a closer look at the pros and cons associated with these opposite-spectrum claims.
Age 62: The primary temptation of collecting benefits at age 62 is not having to wait. Being able to get your hands on your benefit as soon as you're eligible can be particularly intriguing if you have debts you want to repay, are currently out of work, or have one or more chronic illnesses that could shorten your lifespan.
The other lure of an age 62 claim is the expectation that benefit cuts are less than a decade away. The 2024 Social Security Board of Trustees Report estimates that the Old-Age and Survivors Insurance Trust Fund (OASI) will deplete its asset reserves by 2033. If the OASI's asset reserves are exhausted, retired workers and survivor beneficiaries could face payout cuts of up to 21% in nine years . Collecting Social Security income as early as possible might be an effort to front-run potential cuts.
On the other hand, claiming benefits at age 62 will permanently reduce your monthly benefit by up to 30% , depending on your birth year. Early filers can also be exposed to the retirement earnings test, which allows the SSA to withhold some or all of your benefits , depending on how much you earn.
Age 70: At the other end of the spectrum, claiming benefits at age 70 will maximize what you'll receive monthly . In exchange for waiting eight years following your initial eligibility to collect, you'll receive 24% to 32% more per month (depending on your birth year) than you would have been paid at full retirement age.
While the maximum monthly payout probably sounds great, there's still a potential drawback to collecting at age 70. The concern is that there's no guarantee you'll live long enough to maximize what you'll receive from Social Security compared to what you would have collected if you had claimed your payout at an earlier age.
With a clearer understanding of what's at stake, the all-important question becomes: Is it better to collect Social Security at 62 or 70? An extensive study released five years ago appears to have this clear-cut answer.
Image source: Getty Images.
Patience is usually the most important factor when maximizing your Social Security income
Before diving in, let me preface this discussion by noting that everyone walks their own unique path. The combination of your financial needs, access to retirement plans, tax implications, marital status, personal health, and so on will be unique to you. It should play a role in deciding which age makes the most sense for you to collect Social Security benefits.
That said, researchers at online financial planning company United Income released a report five years ago ("The Retirement Solution Hiding in Plain Sight") examining the role of claiming age in optimizing Social Security benefits. Using data from the University of Michigan's Health and Retirement Study, United Income analyzed the claims of 20,000 retired workers to determine how many maximized their lifetime income from Social Security and what age(s), if any, gave retirees the highest likelihood of optimizing lifetime benefit collection.
The headline figure from the study was that only 4% of the 20,000 retired workers studied had optimized their lifetime benefit collection from Social Security. Since there is no concrete blueprint for claiming benefits, this finding isn't all that surprising.
The more telling aspect of United Income's study pertains to the inverse relationship between actual and optimal claims . Whereas 79% of the 20,000 retired workers studied began collecting their benefits from ages 62 through 64, only a cumulative 8% of claims at these three ages would have maximized lifetime income from Social Security.
Comparatively, while few retired workers chose to wait until age 70 to begin collecting their benefits, researchers found that the latest traditional claiming age would have been optimal for 57% of the retired workers analyzed . The four ages that gave retired workers the highest probability of maximizing their lifetime collection from Social Security were (in order) 70, 67, 69, and 68.
The findings from United Income's study don't guarantee that claiming benefits at age 70 is the smartest choice for future retirees. As noted, there are viable reasons that collecting at age 62 (e.g., having one or more chronic illnesses) can make sense.
But what this study does show is that when examined on a broader scale, patience can be incredibly valuable. If you're in your 50s or 60s and are in relatively good health, waiting is statistically rewarded , more often than not, when it comes to collecting Social Security income.
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